Smoking creates negative consumption externality

Reference no: EM13856414

Smoking creates negative consumption externality as the social cost of smoking is much higher than its private cost. Prop 86 of the Nov 7, 2006 election proposes to impose an additional tax of $2.60 per pack of cigarette. Does this tax increase the social welfare of Californians in the long run?

Reference no: EM13856414

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